5.1. Cooperation with the Regions

For more than ten years, PJSC Gazprom has been taking part in a major program for urban improvement of the historic center of St. Petersburg.

In 2019, a set of improvement activities was carried out in a number of streets in the Petrogradsky District of St. Petersburg, and decorative outdoor lighting was upgraded.

In December 2019, LED street lights were installed in Nevsky Prospekt, which became the city’s first large street that transitioned to LED lighting. After old sodium lamps were replaced with new LED ones, the power consumption required to light Nevsky Prospekt went down by 30%. Power savings for the year totalled RUB 2 million.


Russian regions are covered by agreements with PJSC Gazprom


new cooperation agreements and contracts were signed with Russian regions in 2019

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The Gazprom Group’s cooperation with Russian regions is based on a balance between the interests of the Group’s companies, public authorities of the constituent entities of the Russian Federation, and organizations operating in the regions. Importantly, this cooperation focuses on the interests of local residents: the Group establishes new jobs, improves local infrastructure, and implements charity projects.

As part of the project on the expansion of UGSS’ gas transportation capacity at the Gryazovets—Slavyanskaya CS section in the North-West region, 458 new jobs are to be created in the Kingiseppsky, Volkhovsky, and Boksitogorsky Districts of the Leningrad Region. In 2019, Gazprom Transgaz Saint Petersburg LLC added 256 new jobs as required for the development of the Slavyanskoye Gas Pipeline Operation Center, a new branch involved in implementing PJSC Gazprom’s Nord Stream 2 strategic project.

In 2019, the Gazprom Group continued its interaction with public and municipal authorities of the constituent entities of the Russian Federation to create a favourable environment for the Group’s business and to develop a legislative framework for cooperation. Existing forms of partnership were improved and steps were taken to find new ones.

Gazprom’s relevant activities in this area are governed by the Regional Policy ConceptApproved on May 22, 2003 by resolution of OJSC Gazprom Management Committee.. The document sets forth a multi-level system of relations between the Company and the constituent entities of the Russian Federation that is based on cooperation agreements.

In the reporting year, the agreements covered 81 Russian regionsExcept the Magadan Region, Chukotka Autonomous Area, Republic of Crimea, and the city of Sevastopol.. In 2019, ten new cooperation agreements and contracts were signed.

These documents provide for framework conditions, inter alia, to develop business operations, protect the environment, and support indigenous peoples. In accordance with the documents, the Group’s companies are also to take part in developing regions’ infrastructure, as well as building and repairing facilities of social importance.

In the Komi Republic, throughout 2019, Gazprom Transgaz Ukhta LLC allocated RUB 194.4 million for an overhaul of Ukhta Town Hospital No. 1, RUB 171.1 million for an overhaul of the Ukhta Children’s Hospital, and RUB 53.26 million for an overhaul of the Ukhta Interterritorial Maternity Hospital. The unsatisfactory state of these hospitals prevented residents of Ukhta, Vuktyl, and Sosnogorsk from accessing modern healthcare.

The agreements and contracts signed to date take into account PJSC Gazprom’s strategic interests in respective regions as regards commercial development of hydrocarbon fields, natural gas transportation, gas infrastructure expansion and gas supplies, and environmental safety and protection in the areas impacted by operations of PJSC Gazprom’s subsidiaries. The agreements aim to further promote traditional partnerships and mutually beneficial relations between the parties.

The agreement with the Khanty-Mansi Autonomous Area — Yugra (KhMAA — Yugra) provided for co-financing by PJSC Gazprom (investment program of Gazprom Transgaz Yugorsk LLC) and the Government of KhMAA — Yugra of projects in 2019 to build social and transport infrastructure facilities in municipal districts of the autonomous area such as dormitories for shift personnel, sports and fitness centers, and motor road segments. The expenditures of PJSC Gazprom amounted to RUB 287.48 million.

Pursuant to the agreements, the regional governments will be providing assistance to the Group’s companies, among other things in geological exploration of the mineral resource blocks, design, surveying and construction works, timely review of the utility tariffs for services provided by the subsidiary companies to customers, simplifying the procedure for execution of land acquisition documents by the municipal authorities.

Under an agreement of intent for the implementation of PJSC Gazprom’s investment project in the Sakhalin Region, an office complex, social and sports infrastructure facilities, and housing for the Gazprom Group personnel will be erected in the city of Yuzhno-Sakhalinsk.

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The Home Towns program of Gazprom Neft is one of the most successful and renowned community development initiatives run by Russian companies. It brings together all of Gazprom Neft’s social projects, ranging from small-scale volunteer campaigns, town-level celebrations and major international festivals to construction of residential buildings and sports centers.

In 2019, the Home Towns program won the Grand Prix at the Leaders of Corporate Charity, Russia’s most widely recognized social investment competition.

The construction of the Amur GPP supports local communities and takes into account their interests

Yury Lebedev, Director General of Gazprom Pererabotka Blagoveshchensk LLC

Gazprom Pererabotka Blagoveshchensk is the investor and customer in the Amur Gas Processing Plant construction project. What does the company do to meet the interests of the people who live in the area influenced by the project?

In our stakeholder engagement, we use a range of tools, with regular public hearings and consultations being the most effective ones. Activities like these help identify the most pressing concerns and expectations of people related to various stages of the project. Also, the Community Council was formed which includes 20 opinion leaders from among local residents representing the government, non-governmental organizations, and cultural institutions.

In 2019, public hearings focused on the amendments to the Amur GPP design documentation. The Community Council also met three times during the year. Matters discussed included the progress in the plant construction, certification for local residents wishing to apply for blue-collar positions open at the project, the project’s benefits for the budget and infrastructure of the Svobodny town, tools to help foreign workers socialize, and charity projects.

Is there a grievance mechanism in place for this project?

Any stakeholder has the right submit a query or complaint related to any aspect of the Amur GPP construction. This can be done by mail, e-mail, or by calling the Hot Line of NIPIGAZ, the general contractor of the construction. Another option is to use suggestion boxes. Those are located at the project’s information center in Svobodny and at construction and personnel accommodation sites.

In 2018–2019, most of the grievances came from employees and were related to their living conditions and occupational and industrial safety. Queries from local residents focused on employment opportunities offered by the project and concerns about the conduct of those involved in the GPP construction, as well as about territory improvement.

Under the Regulation on Grievance Processing of Gazprom Pererabotka Blagoveshchensk LLC, a complaint or query is to be handled within 10 business days. Our experience shows that 85% of issues are resolved within 3–5 business days.

In general, we have managed to build a convenient and effective framework for stakeholder interaction. In addition to quickly addressing ongoing issues, it also lays the foundation to promote a sustainable social partnership.

What activities were carried out in 2019 to support local communities? What are the plans for 2020?

In 2019, charity expenses of Gazprom Pererabotka Blagoveshchensk LLC totalled RUB 7 million. Financial assistance was extended to a dedicated Gazprom Class, rural schools, boarding school, the Svobodny Social Orphanage for Children, and a rehabilitation center. The company provided considerable support to regional authorities by mobilizing construction equipment of contractors engaged in the project to deploy it to fight the summer flood and its consequences in the region. Gazprom Pererabotka Blagoveshchensk LLC also helped residents and educational institutions affected by the flood.

In line with the Local Communities Development Plan, the company uses two approaches: the reactive approach, which is based on traditional processing of requests received from various city and district organizations, and the proactive approach, which was first tried out in 2019. As part of the proactive approach, the Community Council developed and then implemented exciting social projects: Safety and Me series of interactive lectures for younger people, and Svovodny: Everyone’s Local, a festival of national cultures. Going forward, once the Amur GPP is put into operation, we plan to expand our local community engagement and implement procedures for selecting social projects and monitoring their efficiency.

In 2020, financing of activities under the Local Communities Development Plan is to amount to RUB 7 million, same as last year.